4-94 If the investment bank can sell the shares for $34 per share,how much money does NetChoice,Inc.receive?

Question

Quizplus · Accepted Answer

If the investment bank sells the shares for $34 per share, each share will generate $34 - $28 = $6 for NetChoice, Inc.

The total number of shares sold is 30,000,000. So, the total amount of money NetChoice, Inc. receives is:

$6 per share × 30,000,000 shares = $180,000,000

However, the investment bank charges a 15% fee. So, NetChoice, Inc. will receive:

$180,000,000 - (15% × $180,000,000) = $153,000,000

Therefore, the correct answer is choice B ($157,500,000) since it is the closest value to $153,000,000.

4-94 If the Investment Bank Can Sell the Shares for $34